Nov 28 2009
Construction firms demand higher UK feed-in tariff rate
With the UK government’s announcement of the introduction of the Clean Energy Cash Back system, essentially a feed-in tariff designed to attract investment in the British renewable industry, controversy has raged with solar industry insiders believing tariff rates to be too low.
It therefore comes as no surprise that the Federation of Master Builders (FMB) has also announced that they believe the tariff rate which has been set (5p/unit with a subsidy of 36.5p for units of energy generated by small scale solar and wind installations) will be too low to make the UK market competitive and have suggested a rate increase of 10p.
Speaking under the banner of the widely publicised ‘We support solar’ campaign the FMB’s announcement comes in the light of a number of criticisms aimed recently at the Department of Energy and Climate Change (DECC) legislation to be introduced in the April of next year. The FMB is being given the full backing of the National Federation of Roofing Contractors (NFRC), and Electrical Contractors’ Association (ECA) with around 16,000 building firms adding their weight to the ‘We support solar’ demands.
Feed-in tariffs are designed to offer premium, guaranteed rates to small scale producers for renewable energy which is fed in to the national grid and bought by the utility companies. In markets where they have been introduced elsewhere they have proved successful at attracting investment in new solar markets. In Germany and Spain, solar sectors have experienced booms thanks to the attractiveness of solar stocks in those countries with high returns on investment made possible by the feed-in tariff mechanism.
It is certainly considered that while the UK does not enjoy Iberian sunshine levels a strong tariff would enable the sector in the UK to take off and of course attempt to catch up with other mature markets. Some critics have argued that a strong anti-solar lobby in Westminster led by the utility companies has influenced the government’s decision to go forward with legislation which is generally accepted to be insufficient. With this in mind Liberal Democrat MP Simon Hughes stated,
“The proposed “cash back” payments are designed to dampen solar PV demand over the next three years rather than to encourage it. This mindset needs to change. Solar power can play a significant role in the “greening” of our towns and cities, while providing tens of thousands of new construction sector jobs.”
Indeed, with support among certain power brokers and pro-solar lobbies acting to add 10p to the current tariff it may well be possible to tweak the legislation, making it workable in the long term. If not, the ‘We support solar’ campaign may fail to see the fledgling UK PV sector take off.
Tags
carbon emissions China Clean energy cash back Climate change DECC Department of Energy and Climate Change Ed Milliband electricity energy act Energy Bill feed in tariff FIT fossil fuels Germany Gordon Brown green energy green investment green new deal green policy green targets investment Kevin Langley legislation Megawatts National grid photovoltaic PV renewable energy solar solar energy Solar Feed In Tariff solar fit solar industry solar installation solar investment solar panels solar power solar products solar PV Spain UK UK Government US wind power wind turbine
